Archive - Market Intelligence

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November 2018

NatWest extends digital loans to £750k

NatWest has announced the launch of a new digital platform which will be available to its business and commercial customers, allowing them to apply online for secured and unsecured loans of up to £750,000. This is the largest amount of digitally available loans in the industry. Applicants will be able to complete the process in a matter of minutes, with a decision being communicated to customers usually within 24 hours.

Business Money

Octopus Property COO departs

Octopus Property says Nick McAuliffe has left his position as chief operating officer. “In the short term, Nick’s responsibilities will be assumed by the senior management team,” a statement from the company said. Octopus Property earlier this month announced that it would pause on accepting new applications for its BTL products after filling its allocated budget for term funding ahead of schedule.

Bridging and Commercial

EU firms keen on keeping City access

The Financial Conduct Authority has said over 1,000 EU firms have signalled interest in taking up the UK's offer of continued access to the City in the event of a no-deal Brexit. Nausicaa Delfas, the watchdog's international director, said around 1,300 EU firms were seeking to trade within the FCA's temporary permission regime, an arrangement that will allow firms and investment funds in the European Economic Area to continue operating in the City without impediment for three years after a no-deal scenario, to minimise cliff-edge risks.

City AM

Manufacturers sitting on £252bn on assets

New analysis from Wyelands Bank has found that mid-sized manufacturers in the UK are sitting on assets worth £252bn, which they could tap to raise finance for growth. According to the research, original equipment manufacturers have the highest proportion of working capital assets, amounting to 28% of turnover on average. Iain Hunter, CEO of Wyelands Bank, said: “Freeing up these potential working capital assets can help provide the finance that businesses need to grow.”

City AM

Banks demand greater scrutiny of P2P lenders

According to the Sunday Telegraph, big banks are calling on the Financial Conduct Authority and Lending Standards Board to “level the playing field” on regulation of the peer-to-peer lending sector. A source at one high street lender told the paper that the recent float of Funding Circle and problems at property lender Lendy had raised the profile of P2P firms and the need for “adequate regulation”. The FCA has consulted on new rules to tighten regulation of P2P lenders, while the LSB said it was “engaging” with lenders.

The Sunday Telegraph

Tough for newcomers to thrive

Anne Boden, the boss of Starling Bank, has said that conditions remain tough for new market entrants despite renewed efforts to boost competition in the banking sector since the financial crisis. While a raft of new firms entered the lending market, Ms Boden said few have managed to push on to launch current accounts for everyday retail customers. Meanwhile, the boss of Metro Bank insists that competition is stronger than it was in 2008. CEO Craig Donaldson said: "There are more challenger banks, I think that there's an acceptance of new organisations and that people can see the banks are trying to create competition.”

Daily Express

UK construction activity rises

The PMI index for the construction industry, compiled by IHS Markit, rose to 53.2% in October, up from 52.1% the previous month. However, business optimism was the weakest in nearly six years, while new orders dipped from highs over the summer. Howard Archer, chief economic adviser to the EY Item Club, said: “Construction activity clearly benefited over the second and third quarters, making up some of the activity lost in the first quarter to the severe weather, but that help is now likely fading.”

Financial Times

Business confidence slumps

Business confidence has fallen to its lowest level since the financial crisis, according to the latest snapshot index from the ICAEW. The Business Confidence Monitor survey generated an index reading of -12.3 for the current quarter, compared with -0.2 for the third quarter. The survey found that 42% of businesses were less confident about their outlook than they were last year, compared with 31% in the last quarter. A separate survey by EY found that uncertainty was prompting more firms to put M&A plans on hold. EY’s Capital Confidence Barometer found that only 40% of firms were looking to pursue M&A deals in the next year, a fall of 20 percentage points.

The Times

Housing report recommends new planning rules for larger sites

An independent review written by Oliver Letwin MP has claimed that a new set of planning rules should be introduced for sites with more than 1,500 homes, to speed up the property-building process. Among its recommendations are new rules requiring homebuilders to offer a range of different types of properties on big sites, so they can be completed more quickly without “flooding” the market with a large number of identical properties, and incentives for homebuilders to change plans for existing sites so they start offering a variety of property types immediately.

Development Finance Today

Wallace pledges crackdown on facilitators of illicit finance

Security minister Ben Wallace will today launch a new multi-agency national economic crime centre as part of a crackdown on £100bn of money-laundering in the UK. Mr Wallace told the Guardian that the Government will come down hard on estate agents, solicitors and accountants who enable money-laundering but also other facilitators such as public schools, football clubs and luxury goods suppliers. A £48m funding boost will be provided to the National Crime Agency to recruit more officers to probe domestic and international crime. Professionals who fail to report suspicious activity will face sanctions and jail. He added that in order to ensure the City of London is successful post-Brexit “then it has to have a reputation for cleanliness and security.” The Government is also expected to harden its approach to Scottish limited partnerships, which are thought to be used by foreign criminals to launder dirty money in the UK .

The Guardian

Brexit to blame for fall in regulated bridging loans?

Gareth Lewis, commercial director at MT Finance, has suggested that a third-quarter decline in regulated bridging loans to the lowest level since 2015 could be due to the UK’s impending departure from the European Union. The loans fell to 31.6% of all lending, compared to 36.8% in the previous quarter. Bridging loan volume transacted by contributors hit £213.35m in Q3 2018, an increase of £15.4m on the previous quarter. Mr Lewis said: "The data continues to show that property investors are seeking attractive opportunities to acquire properties where they can add value, a trend that shows no sign of slowing down. Conversely the transaction flow in the regulated space has continued to show signs of slowing down. Is this a direct response to the everyday purchaser taking stock of Brexit and holding fire before looking to commit to the purchase of a new residence?"

Bridging Directory

October 2018

Global companies ramp up R&D spending in UK

A report from PwC reveals that the world's biggest businesses drove an extra £3.5bn into R&D in the UK this year as global spending growth jumped to a decade high. The inflow marks an increase of 10.7% on last year, when R&D investment fell by 8.9%, and puts the UK close to the global R&D growth rate this year of 11.4% - the fastest pace of growth since 2008.

The Daily Telegraph

Entrepreneurs’ tax relief rules tightened

Philip Hammond has tightened the rules on entrepreneurs’ tax relief, so entrepreneurs must, from 2019, own a business for two years before selling in order to qualify for the relief. The relief means owners pay a lower CGT rate of 10% when they sell all or part of their business, compared with a normal rate of 20%. However, the Chancellor also announced that, from October 29th, entrepreneurs must have a greater stake in the business to qualify. Nimesh Shah, partner at Blick Rothenberg, commented: “The overnight change will cause concern for those entrepreneurs who believed they qualified for entrepreneurs’ relief but no longer do so.” Sam Smith, chief executive of broker FinnCap, welcomed the changes, stating: “Making the relief available only to entrepreneurs who have owned their business for over two years should help promote a stronger commitment by owners to their businesses and encoura ge them to plan for the long term.”

Financial Times

HMRC will be at front of queue when firms go bust

Philip Hammond said yesterday that HMRC will become a preferred creditor in insolvencies in a move criticised by R3, which warned it could be "a retrograde and damaging step to UK plc if not thought through carefully." The Chancellor said the move would "ensure that tax which has been collected on behalf of HMRC, is actually paid to HMRC," but Michael Wistow, co-head of White & Case, described it as a "retrograde step". He said: "Every time this has occurred in the past HMRC has abused this power and led the liquidation of otherwise salvageable businesses." Peter Kubik, partner at UHY Hacker Young, added that the change would "push ordinary trade creditors much further down the pecking order". The Government will also end the practice of purchasing services through offshore companies.Financial Times

IR35 extended to private sector

Philip Hammond’s decision to extend the IR35 system from the public to the private sector could bring in over £1bn in tax revenue in its first year. Large and medium-sized companies will have to review all their contracts with freelance staff and determine whether they should be taxed under IR35 rules. The move, which will come into effect from April 2020, is described by Julian Sansum of PwC as “one of the most significant changes to the operation of employment taxes for many years” which will “put a significant burden on business at a time when contingency planning for Brexit is already stretching resources”. Experts say businesses in the construction and manufacturing sectors are among those most likely to be impacted.

Financial Times

Hammond announces tax cuts for 32m people

From next April people will be able earn £12,500 a year tax-free and will not pay 40% tax until they earn more than £50,000. Those earning £12,500 will save £130 a year compared to their current income tax bill thanks to the rise in the personal allowance. Those earning £50,000 will keep an extra £860 compared to their current income tax bill, reduced to £520 once NI is taken into account. The announcement by the Chancellor in his Budget yesterday brings forward the Conservative manifesto pledge to raise the thresholds from 2020. The Treasury says the move will cut taxes for 32m people.

Daily Express

New Digital Services Tax announced

Philip Hammond detailed a new UK Digital Services Tax in his Budget that will target tech giants generating £500m or more a year in global revenues by 2020. The Chancellor said he would have preferred a “global agreement” but reaching it was proving painfully slow. However, industry leaders warned that firms could pull their investment as a result of the move. Firms will be taxed 2% on the revenue they make from advertising and online marketplaces from April 2020. Julian David, CEO of TechUK said it “risks undermining the UK's reputation as the best place to start a tech business or to invest.”

Daily Express

Lendy case could be first of many

The type of legal action facing Lendy could also be brought against other peer-to-peer lenders, experts have warned. Last week it emerged that Lendy and some of its investors were being threatened with a £10m damages claim by one of the company’s largest borrowers, who accused Lendy of unfairly giving notice on its loans and failing to arrange for it to receive further funds in line with its contract. “There will be more high-profile cases like this and more P2P investments will fail,” says Patrick Connolly, the head of communications at Chase de Vere. Mark Posniak, the managing director of Octane Capital, added that he expects “further fall-outs” because some lenders do not understand the risks involved. Elsewhere, the FT’s Neil Collins says events at Lendy illustrate British investors’ “near-obsession with property, viewed as an asset class which cannot fall in value.”

The Times

Call for rates rethink

Philip Hammond is facing more pressure to act on business rates after Debenhams announced plans to close 50 stores following the worst loss in its 240-year history. The retailer’s chief executive Sergio Bucher highlighted that Debenhams now pays £80m a year in business rates and called on the government to end the “preferential” tax regime for online retailers. The Telegraph’s Jeremy Warner says there is now an urgent need to shift from a tax based on property to one levied on sales in the retail sector. He adds that increasingly, business rates are treated not as a conventional tax but as a money machine for the Treasury.

The Guardian

MPs call for urgent overhaul of small business lending

MPs have called for a drastic overhaul of Britain’s approach to small business lending, citing the “scandalous” treatment of companies at the hands of big banks. A report by the Treasury select committee said commercial loans must be urgently regulated to prevent a repeat of the abuse of thousands of SMEs after the financial crisis. MPs concluded that the Financial Conduct Authority’s decision not to punish RBS for the actions of its Global Restructuring Group (GRG), which the regulator had found to have systematically mistreated small businesses, was a “damning indictment of the regulatory regime and a sad reflection of its inadequacies”.

The Times

London Square secures bumper expansion backing

Residential flats builder London Square has secured £200m of new funding - £150m from NatWest, HSBC and Allied Irish Bank GB, and a £50m loan from Pricoa Capital. In the year to March the firm completed 490 homes, and notched up sales of £287.5m. Its £2bn pipeline includes sites in Bermondsey and Caledonian Road, north London.

Evening Standard

Code Investing announces £500m SME funding line

Code Investing has announced that its institutional funding lines for UK SMEs have hit £500m. The loans are being provided in the form of structured and asset finance, hire purchase and leasing agreements, bridging facilities, cash flow and unsecured loans. Code CEO Ayan Mitra said that SMEs and commercial brokers are starting to discover the benefits of institutional loans.

Bridging and Commercial

RICS urges rates review

The Royal Institution of Chartered Surveyors (RICS) has called on the government to review the business rates system in next week’s Budget. The organisation says 39% more respondents reported a further rise than a fall in retail availability in the third quarter of 2018, as fewer businesses demanded space in a sector that is struggling to compete with e-commerce rivals.

City AM

Britain’s financial services see world’s biggest surplus

Analysis by TheCityUK shows that Britain's financial services industry had the biggest trade surplus in the world last year, at £68bn. The total is bigger than the US, Switzerland and Luxembourg – the second, third and fourth nations on the list - combined. The research shows that the UK holds 37% of all foreign exchange trading and an 18% share of cross-border bank lending. The analysis also shows that at $10.8tn, the UK's banking sector assets were the largest in Europe last year. Anjalika Bardalai, chief economist at TheCityUK, said: "The UK is not only a leading global financial centre, it is also Europe's financial hub.”

The Times

IBM to launch open banking platform

IBM is set to launch a new open banking platform that will enable banks to take an incremental approach to open banking, opening up their legacy systems and tapping into APIs. Say Tom Eck, CTO, industry platforms, IBM: "In short, it enables you to augment and revitalise your existing systems, rather than undertaking the cost, effort and risk of a complete overhaul." The platform features an ecosystem that contains APIs from IBM Financial Services and third-party fintech companies, letting users choose from a range of APIs to add capabilities such as financial risk assessment, payments, AI and blockchain to their apps.

Finextra

Carney: Banks can cope with no-dealThe Governor of the Bank of England, Mark Carney, has said that Britain could withstand a hard Brexit and tough trade relations after Britain leaves the EU. The BoE does not see the scenario as the most likely outcome in March next year, when Britain formally leaves the EU, but it is still possible. Mr Carney said: “We aren't hoping for the best, we're preparing for the worst in several ways.”. Mr Carney added that about £100trn of cross-border derivative contracts may be disrupted by loss of regulatory permissions for clearing houses after Brexit.The Times

Banks fight back against the fintechsThe Telegraph’s Iain Withers profiles how the big UK banks are launching their own financial technology start-ups to compete against the fast-growing digital banks such as Monzo, Starling and Tandem. RBS is developing a spin-out online bank called Bó, which is expected to launch in beta testing mode next year. Rivals Barclays, HSBC and Lloyds also have launched separate digital hubs churning out potential new services scattered across London’s tech clusters. Josh Bottomley, head of HSBC’s digital operations, said the bank was investing heavily in fintech and has so far created “1,000 jobs that didn’t previously exist”. Robin Knox, CEO of Tandem, says he is not surprised that some high street banks are launching new brands. He is relaxed about the threat they pose, adding: “They may try to emulate start-ups with new businesses with new names in new offices, but th ey will struggle to compete with us in terms of speed and culture.”The Sunday Telegraph

Name checks to begin on bank paymentsAs part of plans to combat fraud, the name of someone receiving a payment will be as important as their bank details for the first time from next summer. The plans, which have been revealed by Pay UK, will alert the sender if the name does not match the account. It is designed to combat cases when fraudsters mimic a genuine business and attempt to trick people into sending money to an account controlled by the con-artist.BBC News

Oracle’s NetSuite adopted by LandbayBuy-to-let mortgage lender Landbay has chosen Oracle NetSuite to attract more users to its platform, while enabling it to make swifter decisions around mortgage applications and investor sign-ups. The firm says it is now able to approve any loan application in 48 hours, against the industry average of three weeks.Best Advice

The Bank of England has predicted that banks will tighten mortgage lending over the next three months by the greatest amount since 2008. The news comes just six months before Britain leaves the European Union, and the survey suggests that high street banks and building societies are becoming more risk-averse, squeezing the supply of secured borrowing and loans for businesses. Helping to calm concerns at the Bank about the growth of consumer credit over the past couple of years, lenders expect demand for credit card and other unsecured loans to consumers to drop by the most since late 2011. Howard Archer, chief economic advisor to the EY Item Club, said: “The survey for the third quarter should go down well at the Bank of England, given its view that recent rapid growth in consumer credit has created a ‘pocket of risk’.”The Times

Bank of England warns over leveraged business loansThe Bank of England has warned that £31bn worth of risky loans have been issued this year to businesses that already shoulder large levels of debt. So-called "leveraged loans" to indebted businesses, which are packaged up and sold in global financial markets similar to sub-prime lending before the financial crisis, are different to standard lending by UK banks, who would be unlikely to lend to struggling firms.BBC News

Professionals question number of property investment platformsAccording to a recent Development Finance Today poll, 65% of industry professionals feel there are too many property investment platforms in the market. Bronwen Vearncombe, director at Property Investing Foundation, said that it was hard to decipher which platforms were best, as there are a lot of online investment platforms out there, many of which promised very high returns to grab investors’ attention.Development Finance Today

£275m bond launched by Unite GroupA £275m sterling-dominated senior unsecured bond is to be launched by The Unite Group PLC, the company behind student housing developer Unite Students. The bond, which is for a term of 10 years and will bear interest at a rate of 3.5% pa, is to form part of Unite’s overall finance strategy as it attempts to further diversify its sources of funding and move more of its funding to an unsecured basis. Joe Lister, chief financial officer at Unite Group, said: “The new financing will provide increased flexibility to support our portfolio strategy as well as lengthening the maturity and reducing our overall cost of debt.”Development Finance Today

Fraud reports dismissed by banks’ algorithmsFigures released by the Home Office show that more than 450,000 reported bank frauds over the past three years have been dismissed by banks’ automated systems.The Sunday Times

Horta-Osorio: Curbs on banks have gone too farAntonio Horta-Osorio, the CEO of Lloyds Banking Group, has suggested that Britain’s financial sector is now too over-regulated, having been badly policed in the years’ up to the financial crisis. In an interview with the Sunday Times, he said: “I think that in life, when you have excesses in one direction, normally to correct, you go a bit too much in the other direction - like a pendulum. Sometimes the pendulum goes further in the other direction before it comes to the middle. In aggregate, I would think that has happened in the UK.” He also apologises for the scandal at the Reading office of HBOS in the piece, and says his “total focus” was on helping SMEs. He also notes that the bank has devised a programme to help Lloyds staff “improve mental and physical resilience”. It will be offered to all 75,000 employees in due course.The Sunday Times

Moulton regrets launching fundPrivate equity veteran Jon Moulton is interviewed in the Mail. In the piece, Mr Moulton reveals that his last Better Capital fund – launched in 2012 – has estimated losses of more than £140m, caused by the troubles of City Link, Jaeger and double-glazing firm Everest. He describes the fund as a “wreckage”, adding that it will take him between 18 months and four years to close it and sell off its remaining investments.The Mail on Sunday

UK house prices grew in SeptemberUK house prices grew 2% year on year for September, Nationwide has said, up 0.3% from August to September to an average of £214,922. England had the slowest rate of annual growth, at 1.4% for the quarter, with Northern Ireland up 4.3%, and Scotland and Wales’ growth rates slowing 2.1% and 3.3%, respectively, while London house prices fell 0.7% year-on-year to £468,544 for September. Nationwide's chief economist, Robert Gardner, said: “Subdued economic activity and ongoing pressure on household budgets are likely to continue to exert a modest drag on housing market activity and house price growth this year, though borrowing costs are likely to remain low.”City AM

London developers hit by new stamp duty tax on overseas buyersShares in developers reliant on overseas investors to fund new luxury apartment blocks in London fell yesterday after the government announced plans to tax foreign buyers of UK property.Financial Times

Lenders attempt to galvanise B2L market as tax changes biteLenders are improving their offer to buy-to-let landlords after changes to the tax rules cut demand for borrowing. Landlords were being discouraged by the stamp duty surcharge on second homes and were slowly losing the ability to offset mortgage interest against profits, experts said.The Daily Telegraph

New stamp duty levy for foreign buyersTheresa May has announced plans for a new stamp duty levy of up to 3% for buyers of property in the UK who do not live or pay tax in the country. Mrs May said: “Britain will always be open to people who want to live, work and build a life here. However, it cannot be right that it is as easy for individuals who don’t live in the UK, as well as foreign based companies, to buy homes as hard working British residents." The announcement counters Jeremy Corbyn’s pledge to tax second home owners, but the Sunday Telegraph contends that the tax hike will risk criticism that it could harm efforts to paint Britain as a global nation open for business after Brexit. The Government will announce plans to launch a consultation on the tax, which will include the level of tax that will be levied.The Sunday Telegraph

Funding Circle debuts on LSEFunding Circle has completed its London stock market flotation, with a valuation of £1.5bn. Samir Desai, chief executive and co-founder of Funding Circle, described the flotation as a milestone for the business and said that it showed that Britain was a "great place" to build a financial technology company. Neil Rimer, a partner who led Funding Circle's investment and board member of the company, said the IPO showed that after a "decade of rapid experimentation and growth", the European fintech sector had now "come of age".The Daily Telegraph

This Service was produced by Early Morning Media.

September 2018

Time to clean up the London laundromatThe FT calls for a crackdown on money laundering, arguing that UK authorities have for too long been reluctant to adopt or enforce tougher safeguards against dirty money.Financial Times

RBS' digital bank to be called BoRoyal Bank of Scotland is looking to launch a standalone digital-only bank called Bo, with it believed that it will be pitched as a rival to challenger banks such as Monzo, Revolut and Starling Bank. It is expected to launch in 2019, with the aim of migrating 1m NatWest customers to the mobile platform. Bo, which will be overseen by former RBS COO Mark Bailie, is expected to utilise artificial intelligence to help customers manage their financial affairs.The Daily Telegraph

Scottish specialist lending market predicted to double in 2019The Scottish specialist lending market is set to double in size next year due to the influx of new lenders with much improved criteria, product choice and rates, predicts Your Expert Group. The Glasgow-based specialist finance broker said that, due to a saturated specialist lending sector in England, challenger banks and alternative finance providers were looking at new markets; it added that, in the fourth quarter alone, four new complex residential and BTL challenger lenders are due to open their doors to Scottish brokers and borrowers.Bridging and Commercial

Funding Circle reduces IPO price rangePeer-to-peer lender Funding Circle has narrowed the price range of its IPO to 440p-460p, from an initial 420p-530p, due to a lower level of interest in the offering than initially anticipated. Funding Circle is looking to raise around £300m when it lists on the main market of the London Stock Exchange next month.P2P Finance News

May claims crackdown threat on ‘dirty money’ is paying offTheresa May says unexplained-wealth orders are already deterring potential criminals from using the UK as a haven for dirty money. The prime minister said the threat posed by the legislation “has actually meant some people have changed their behaviour and are now playing by the rules.”Financial Times

RBS boss expects smaller banks to lose out to big lendersRBS chief executive Ross McEwan predicts Britain’s challenger banks will struggle to compete against the resurgent big six lenders. Mr McEwan said small lenders would come under pressure as larger rivals such as RBS picked up speed after a decade of hefty restructuring and misconduct costs. His comments come as challenger banks prepare to be briefed on Thursday on the details of a contest for £833m of funding, provided by RBS, designed to boost competition in business banking.The Daily Telegraph

Frankfurt winning Brexit bank movesFrankfurt has attracted jobs from Barclays, Lloyds Banking Group, Citigroup and Morgan Stanley, among others, winning the race to attract the banking jobs leaving London because of Brexit, according to a fresh survey by German-headquartered bank Helaba. Paris has gained from Bank of America, Goldman Sachs and HSBC.City AM

Eyes focus on peer-to-peer lendersThe Sunday Times reports that restructuring specialists are looking at the peer-to-peer lending sector for signs of weakness, as speculation mounts about the sector will cope when the next recession hits. Figures from AltFi show that the platforms will lend more than £7.5bn to consumers and small firms this year – with 75% coming from the three biggest operators in the sector: Funding Circle, RateSetter and Zopa. Experts said they are worried that heavy losses at one platform could spread across the industry and drain confidence.The Sunday Times

Experts warn on Bitcoin risksExperts have warned that Bitcoin-using millennials could be harmed throughout their investing lives by developing dangerous savings habits. Patrick Connolly of financial adviser Chase de Vere commented: "It is almost impossible for investors to understand the mechanics behind crypto investments and there is no protection in place if it all goes wrong".The Daily Telegraph

Thousands of bank branches closed in four yearsResearch from consumer group Which? has revealed that nearly 3,000 high street bank and building society branches have shut since 2014. Jenni Allen, managing director of Which? Money, commented: "The rate at which free-to-use cashpoints are closing is alarming. Plastic cards may have overtaken cash as the most commonly used payment method but 2.7m British adults rely almost wholly on cash.” George McNamara, director of policy at charity Independent Age, noted: "With increasingly large distances between bank branches, this can cause difficulties for customers who rely on public transport. Banks must ensure that all customers can access services, advice and offers using their preferred method of communication, whether that be over the internet, on the phone or in person."Daily Express

Banks approve 80% of SME finance applicationsUK Finance’s SME update for Q2 2018 reveals banks approved eight out of 10 applications for SME finance during Q2 2018. The figures show that 69,300 of new SME loans were approved by banks for a value of £7.1bn - a far higher figure than the £15m that the bank referral scheme has provided to SMEs since it launched almost two years ago. However, despite the 80% approval rate by banks in Q2, Colin Goldstein, head of strategic partnerships at iwoca, said securing credit remained one of the biggest challenges for a growing small business. He added: “Making access to capital seamless and hassle free, relieving owners of the burden of extra financial paperwork and eliminating wasted time will see SMEs regain their confidence.”Bridging and Commercial

Mass bank closures are unacceptableAge Scotland has said that mass bank closures are “unacceptable” for older people and innovative solutions like shared banking should be introduced. Following a bank closure debate at Holyrood, Age Scotland called on banks to introduce measures to alleviate the loss of local branches. Brian Sloan, Age Scotland’s CEO, said: “Physical branches are important to older people. They prefer having a face-to-face conversation about their finances with a real person.” Meanwhile, the cross-party Scottish Affairs Committee has accused the UK Government of “burying its head in the sand” after refusing to use its majority stake in RBS to halt the branch closures programme.The Scotsman

France seeking to lure UK fintech jobsDelphine Gény-Stephann, the French junior economy and finance minister, has launched a new government-backed tech incubator to lure thousands of UK financial technology jobs to France. The incubator offers companies support with funding and strategies, and also offers foreign companies “relocation packages”.The Daily Telegraph

A third of small businesses unsure how to get financeA poll by the British Business Bank reveals that a third of British small business owners would like to expand but do not know how to go about securing finance. Only 5% considered bringing in a business angel and 7% thought about crowdfunding. Over half those surveyed said they expect their business to grow over the next 12 months. A separate survey for Hitachi's financing arm found two-thirds of small businesses plan to expand in the next three years.The Sun

Rics calls for property tax overhaulThe Royal Institution of Chartered Surveyors (Rics) has argued a housing tax overhaul, including ending stamp duty on certain properties, could rebalance the market and "reignite activity". It said the Government should look at what changes are needed to create a more vibrant property sector with a full-scale review of the stamp duty system.Yorkshire Post

House prices will not crash after BrexitGeoffrey Yu, head of UK investment for UBS Wealth Management, has said that he does not expect house prices to collapse following Britain’s exit from the EU, despite warnings from Mark Carney that they could plummet by as much as 35% if there is a “disorderly” Brexit. Mr Yu said that UBS expected a Brexit deal to be struck between the UK and the European bloc, meaning house prices will remain stable.Daily Express

Mortgage rates largely staticMortgage rates have remained largely static since the Bank of England raised the base rate from 0.5% to 0.75%, according to information website Moneyfacts, with two-year fixes dropping to an average 2.51% from 2.52% the day after the decision in August. The difference for two-year fixes, between September 2017 and September this year, is only around 0.31 percentage points - from 2.20 to 2.51% respectively. Meanwhile, the proportion of savings accounts on the market paying above the Bank of England base rate has sunk to a five-year low, analysis has found. Just over two-thirds of savings accounts pay a rate above 0.75 per cent, Moneyfacts found.Daily Mail

Lenders lure BTL investorsThe proportion of homes sold to landlords has reached the lowest level since January 2010, according to Hamptons International. In August 9.9% of sold homes were bought by landlords, compared with an average of 17.6% in the year until April 2016, when a stamp duty surcharge on the purchase of additional homes was introduced. Landlords are now being offered more attractive deals on BTL mortgages, and there are also a record number of mortgages for first-time landlords.The Times

Lloyds closes more branchesLloyds Banking Group is to close a further 15 branches as it presses ahead with plans to streamline the business. A Lloyds spokesman said: “These branch closures are in response to changing customer behaviour and the reduced number of transactions being made in branches. All branches announced for closure have a Post Office less than half a mile away, so customers can still access their banking locally.”The Daily Telegraph

Free ATMs closing at record rateCash machine network co-ordinator Link has provided figures showing that more than 250 free-to-use ATMs are disappearing a month as operators shut unprofitable ones. There are around 53,000 free machines in the UK - but the number is shrinking at a record rate as people use less cash. The Payment Systems Regulator is cracking down on the closures and asking for more network protection. Managing director Hannah Nixon said: “The requirements we intend to place on Link will help ensure that Link achieves their commitment to protecting the geographic spread of free-to-use ATMs across the UK.”BBC News

Remortgaging surged in JulyRemortgaging spiked to its highest level in more than a decade in July, according to data from UK Finance, with around 46,900 new homeowner remortgages completed - up 23.1% compared with the same month last year. Total remortgaging deals worth £8.7bn were completed in the month. First-time buyer mortgages completed in July edged up 1%, to 31,400, with the average loan standing at £145,000. Around 14,700 new buy-to-let remortgages were completed in the month, marking a 7.3% increase on July 2017.Daily Mail

Views on valuation documentationDevelopment Finance Today has asked specialist finance brokers whether lenders should have the authority to withhold valuation documentation. Robert Collins, director at Sirius Property Finance, said “It benefits all parties if information like this can be shared more openly [so that] everyone is aware of the true situation.” Elsewhere, Stephen Burns at Adapt Finance, said: “We expect the lender to release the valuation to our client in every case”. John Kerrigan, director of the structured finance team at Arc & Co, added that lenders tended to hold on to valuation reports for control and to avoid external influence. However, Joe Arnold, managing director at Arnold & Baldwin, believed that it was important to remember that a valuation report was undertaken by a lender for their protection and so it was up to that lender to choose whether or not to disclose the information.Development Finance Today

SMEs still struggle to find financeThe Sunday Times says companies looking for finance are still struggling to secure loans, despite big banks insisting they are committed to lending to small businesses. Figures from UK Finance show the outstanding balance of loans and overdrafts to small businesses by major lenders fell by 6.9% to £87.2bn across the country between the final quarters of 2015 and 2017, with small business lending in parts of Yorkshire falling by 27.5% in just two years.The Sunday Times

Can banking minnows grow fast enough?Rosamund Urwin examines Britain’s challenger banks in the Sunday Times, and asks whether new entrants to the sector will ever be able to take on the big four banks. She says for truly new entrants such as Metro, Starling and Monzo, the biggest problem is growth. She adds that the path to profitability is also slow, but notes that one thing in the challenger banks favour is technology. Ms Urwin ends by saying that there is a further spectre on the horizon: the possibility that tech titans such as Amazon will venture into banking. In a separate article, Ms Urwin profiles Goldman Sachs’ new bank Marcus. The retail bank will formally open to the British public this month after a soft launch for staff.The Sunday Times

UK venture capital turns its attention towards techThe Telegraph looks at the reasons why UK venture capital companies have upped their investments in the UK tech scene. In the three months to the end of June, around £1.6bn was invested in UK businesses, across 244 deals, and the region accounted for six of the 10 top European deals done. David Mott, chair of the British Private Equity and Venture Capital Association notes that the gap between the UK and the US is also starting to close.The Daily Telegraph

UK Finance: Asset-based lending rises in UKNew figures from UK Finance reveal that lending against assets other than invoices during the second quarter amounted to £4.3bn, a 5.6% year-on-year increase. Invoice finance, where advances are made against debt, fell to £17bn, compared to £17.7bn a year earlier, with total advances to all client businesses supported by invoice finance and asset-based lending standing at £21.4bn, a 1.9% decrease. The total number of finance clients rose 1.1% to 40,333, while the number of clients with a turnover of more than £10 million increased to over 5,000, up 7% on 2017.Asset Finance International

Debt crisis growsA report by the National Audit Office reveals that a fifth of UK adults have less than £100 in savings, raising concerns that the country's savings culture has been eroded by a decade of ultra-low interest rates. Baroness Ros Altmann, a former pensions minister, stated: “Having little or no savings may force people into the hands of loan sharks or high cost emergency loans, and that can lead to a negative spiral of debt.”Daily Mail

RBS to halve number of England and Wales branchesRoyal Bank of Scotland is to cut its English and Welsh branch network in half in January, resulting in the loss of over 250 jobs. Following the restructuring, required after RBS failed to sell its Williams & Glyn brand, NatWest will have 651 branches in England and Wales, plus five in Scotland, while there will be 99 RBS branches in Scotland and 54 in England, including six in London and the south east. Claire Reading, Development Manager at the Federation of Small Business, said the losses would further hurt small businesses which value bank branch access. “Demand for new finance among small firms is already low, hampering their expansion and wider economic growth. A diminished branch network could well make a bad situation worse.”The Daily Telegraph

TSB boss steps down over IT chaosTSB chief executive Paul Pester is stepping down in the wake of the major IT failures at the bank. His departure comes just a day after the bank announced it is investigating how planned maintenance of its online banking systems over the weekend left thousands of customers locked out of their accounts on Monday. TSB non-executive chairman Richard Meddings will take on the role of executive chairman as the search for a new CEO begins. Mr Meddings said: "Although there is more to do to achieve full stability for customers, the bank's IT systems and services are much improved since the IT migration."Evening Standard

Britain remains Europe’s most important financial centreA new ranking to be published today by the New Financial think tank shows that Britain is the most important financial centre in Europe, and second only to the US elsewhere. The UK ranks particularly highly on international factors thanks to the size of the City's banking sector and its pivotal role in the global financial system. William Wright, New Financial's founder and managing director, noted: “London both in terms of domestic financial activity and international financial activity is in a league of its own in Europe.”City AM

August 2018

Consumer loans see slowest growth in three yearsBank of England (BoE) figures show that unsecured consumer credit grew by 8.5% in July, down from 8.8% in July. This marks the slowest growth rate in nearly three years. July saw the net amount of new consumer borrowing decline to around £800m, from £1.5bn the month before. Consumers put the second lowest amount of cash on their credit cards since April 2016 during July, at £213m. Meanwhile, BoE data shows approvals for house purchases fell to 65,000 in July with remortgaging approvals down to 45,000. In June British lenders approved 65,619 mortgages, rising 1.5% from 64,684 in May and reaching the highest level since January. John Eastgate, sales and marketing director at OneSavings Bank, said consumers are "putting the brakes on home buying decisions" amid fears of current political volatility.The Times

Lenders could retreat from BTL marketBTL lenders experiencing sub-optimal success could quietly retreat from the market as margins in the owner-occupied space are much thinner, according to a report produced by Shawbrook Bank. Research predicted that the market would continue to dampen until 2021, before stabilising and return to growth in the following two years.Bridging and Commercial

Wonga collapses into administrationWonga has announced its intention to go into administration. In a statement Wonga said: "Customers can continue to use Wonga services to manage their existing loans but the UK business will not be accepting any new loan applications.” Wonga’s overseas businesses will continue to trade, the company said. The Financial Conduct Authority said it will “continue to supervise Wonga once it is in administration and is in close contact with the proposed administrators with regard to the fair treatment of customers.”The Daily Telegraph

Land values raise UK’s wealth to £10trnThe net value of all of the UK’s assets topped £10trn for the first time in 2017, thanks to surging land and house prices. The ONS said almost all of the rise to £10.2trn from £9.75trn was fuelled by a £450bn rise in land values. Housing wealth now makes up 17.8% of the UK’s net worth, and added to land this takes the two to a total of 70.7% of net assets. The steady increase in land values is expected to trigger further calls for a land value tax or new rules allowing local authorities to benefit from the rise in values by allowing them to buy land earmarked for development.The Guardian

Corporation tax receipts rocketFigures from the Office for Budget Responsibility show corporation tax receipts have surged since the rate was cut. The levy raised £57.6bn last year, when firms handed over 19% of profits. That was 44% more than in 2010 when corporation tax was 28%. Corporation tax receipts have also risen 26% since the EU referendum. Sam Dumitriu of the free market Adam Smith Institute think-tank said the figures should prompt ministers to reduce tax on firms which invest. “A competitive corporate tax rate has made Britain a more attractive place to do business,” he said.Daily Mail

Accountants present proposals to shake-up the audit marketThe Competition and Markets Authority is considering proposals by Britain’s nine biggest accounting firms to shake-up the audit market and end the dominance of the Big Four. ICAEW chief executive Michael Izza, David Barnes, chairman of the accountants’ Policy & Reputation Group, and a representative of ICAS met the CMA on Tuesday to propose suggestions to reform the industry. The CMA gave no indication of whether it would move ahead with a full review of the accounting profession, according to Mr Izza.The Times

Small business group seeks to revive RBS scandalThe SME Alliance – a small business group that lobbies for fair treatment by banks and advisers – is set to launch its own investigation into the treatment of small firms by RBS’s now-defunct Global Restructuring Group. The SME Alliance’s report into the GRG aims to gather “evidence of dishonesty and lack of integrity by RBS executives” which it hopes will allow the FCA to take disciplinary action through a piece of regulation known as the senior managers’ regime (SMR).ITV News

Business borrowing falls by 2.2%Figures from UK Finance show UK business borrowing overall contracted by 2.2% over the last 12 months. The largest fall in lending came in the construction industry, which reported a decrease of 6.9%. However, lending to manufacturers grew by 7.1%. UK business deposits for non-financial companies grew by 1.9% over the last year. Stephen Pegge, managing director, Commercial Finance at UK Finance, said overall demand for finance “remains subdued amid ongoing economic uncertainty.” Meanwhile, gross mortgage lending in July was £24.6bn, about 7.6% higher than a year earlier. Credit card spending was 8.1% higher than a year earlier, with outstanding levels on card borrowing growing by 5.3% over the year.Bridging and Commercial Insider.co.uk

Banks failing to back small firmsBusiness expert Rob Rutter has accused banks of adding to the pressure on high streets by failing to support small businesses when they hit financial difficulties. He said: “Banks have become so slow and bureaucratic they are acting as a handbrake on the economy rather than an accelerant.”Sunday Express

Wonga close to collapsePayday lender Wonga has said it was considering “all options” after reports suggested it was on the brink of collapse. The developments comes after a surge in compensation claims against the firm, amid a government clampdown on payday lenders. According to Sky News, the firm is exploring the possibility of a pre-pack administration. However, it could also look to sell assets, including its Polish subsidiary to bolster its cashflow.The Guardian

UK banks loosen mortgage standards to maintain growthBritain’s banks are relaxing lending standards and reducing fees in order to maintain growth, as profit margins are hit by competition and a weakening housing marketFinancial Times

Phoenixing' bosses face bansDirectors who allow companies to go bust to avoid debts could be disqualified and fined under new powers for the Insolvency Service. Ministers want to curb so-called “phoenixing”, where liabilities such as pension deficits and supplier payments are left behind by companies who then re-emerge under a different name with a clean bill of health. The proposals will enable the Insolvency Service to take enforcement action against directors of dissolved companies for the first time.The Sunday Telegraph

HMRC’s late payment fee increasesHMRC has increased the rate charged to businesses and individuals who pay their tax late. Following the Bank of England’s latest quarter-point rate rise to 0.75%, HMRC lifted its fee by 0.25 percentage points to 3.25%. However, the department has been criticised for having kept the repayment interest rate - the rate HMRC levies on top of sums it owes to taxpayers - at 0.5% since 2009.The Times

Brokers wary of 1% base rate’s impactA survey by United Trust Bank shows that 70% of 108 brokers questioned felt that a further base rate increase to 1% will negatively impact the residential property market. Some 61% of respondents operating in the fields of property and asset finance also felt a base rate increase would stifle SME investment.Bridging and Commercial

Housing transactions remain stagnantThe number of houses being bought and sold edged further down last month, with residential transactions 3.2% lower in July 2018 compared with the same month last year, according to the latest HMRC data. Deals also fell 0.8% from June to July, with 99,270 residential transactions reached. Kevin Roberts, director of Legal & General Mortgage Club, said: “A fundamental imbalance between supply and demand continues to stifle the market, and until this issue is properly addressed, homeowners will find it difficult to downsize or upsize.”Daily Mail

Lender releases inaugural Buy-to-Let ReportFollowing Shawbrook Bank’s previous reports on the HMO market and the Private Rented Sector the NACFB Patron has released their latest research on the Buy-to-Let (BTL) market. The findings explore the impact of several recent government and regulatory changes. Set against the shifting sands of national policy, the issues discussed are vital for brokers, and the professional investor and landlord community. The 2018 Shawbrook BTL Report delivers clarity on what this means for a sector that remains a critical component of the UK housing landscape. Shawbrook Bank

Bridging lending down 6.6% in second quarterThe Association of Short Term Lenders has revealed that the value of bridging loans written by its members has fallen by 6.6% in Q2 2018 on the previous quarter, although it was still up 10.3% year-on-year. Annual completions have risen by 27.2% compared with the year ending 30th June 2017, totalling £3.87bn. ASTL’s CEO, Benson Hersch, said that the “property market may be difficult at the moment, but responsible bridging lenders continue to prosper.”Bridging & Commercial

Buy-to-let lending slumpsThe number of new home loans taken out by buy-to-let landlords fell by nearly one-fifth following a series of tax changes and new regulations. UK Finance said that 5,400 buy-to-let mortgages completed in June, a 19.4% fall from June 2017, when 6,700 were completed. There was also dip in mortgages for home movers and first-time buyers, with 34,900 new first-time buyer mortgages completed in June - a fall of 3.6% on the same month a year earlier.Financial Times

Specialist lending softens in JuneSpecialist lending market activity softened in June, driven by a weaker appetite for business investment. Lending volumes declined 3% year-on-year in the asset finance sector, according to the Finance & Leasing Association, although for the second quarter as a whole they were up 5%. The total follows on from a 10% increase in asset finance new business in May, driven by new finance for equipment in the construction, manufacturing and agricultural sectors. John Cronin, financials analyst at stockbroker Goodbody, said the slowing growth is reflective of the weaker appetite for business investment.P2P Finance News

Slight decline in asset financeAsset finance new business, primarily leasing and hire purchase, grew by 5% in the second quarter of 2018, according to data from the Finance & Leasing Association (FLA), though fell 3% in June compared with the same month in 2017. By channel, direct finance came in at £1.4bn, down 7% year-on-year, while broker introduced finance was up 14% to £519m and sales finance was down 6% to £922m.Leasing Life

UK's house price growth sluggishData from the Office for National Statistics (ONS) show that house prices in London dropped 0.7% in the year to June, the lowest annual growth rate since September 2009 when they fell 3.2%. Annual house-price growth across the country slowed to its lowest level in nearly five years with average property values increasing by 3%, down from 3.5% in May. Slow wage growth, rising mortgage rates and tougher rules on borrowing are constraining buyers, experts say. Chief economic adviser to the EY Item Club, Howard Archer, said: "Housing market activity is still relatively lacklustre, and we expect it to remain so as the extended squeeze on consumer purchasing power only gradually eases, consumer confidence is relatively fragile and appreciable caution persists over engaging in major transactions."City AM

Interest rate will remain low for 20 yearsIan McCafferty, a Bank of England policymaker, has said that the era of low interest rates will last for at least another 20 years, despite official borrowing costs rising gently in the coming years. Mr McCafferty, who is leaving the MPC at the end of the month, said structural changes in the global economy meant UK borrowers and savers should get used to interest rates being “significantly” below the 5% they averaged in the 10 years leading up to the financial crisis in 2008.The Guardian

Banks refusing to raise rates for saversThe Times reports that only one of 100 banks and building societies has passed on last week’s interest rate rise in full to all its savers, leading MPs and campaigners to express criticism. Nicky Morgan, chairwoman of the Treasury select committee, commented: “It’s no wonder that our banks have such a lot of work to do to rebuild trust among customers when they ignore the first opportunity to give a little something back to savers, while moving speedily to increase costs for borrowers.” Meanwhile, James Daley, the managing director of Fairer Finance, said that the FCA should focus on the issue as part of its review of the savings industry.The Times

Shawbrook loan book hits £5.3bnShawbrook Group’s loan book increased by 21% to £5.3bn in the six months to 30th June 2018, while underlying profit before tax was up 23% on the same period in 2017 to £63.1m. Shawbrook said new lending had increased compared with the first half of last year as it looked to continue to expand its customer base into new and adjacent markets.Specialist Banking

Lenders encouraged to embrace innovationMartin Greenwood looks at some of the barriers facing property developers and housebuilders looking to solve the UK’s housing crisis, including a lack of available small sites, and securing access to finance. Alex Michelin, co-founder of CapitalRise, said: “With funding hard to obtain in today's market and buyers less prevalent than they once were, developers are having to be increasingly creative to be successful”, using preferred equity and mezzanine loans to ensure the success of a project. Terry Pritchard, head of origination at Lendy, said that lenders are increasingly risk averse, creating a space for smaller firms to move into with new products.Development Finance Today

Bank of England raises UK interest rates to 0.75%The Bank of England has raised the interest rate a quarter of a percentage point, from 0.5% to 0.75% - the highest level since March 2009. BoE Governor Mark Carney said there would be further "gradual" and "limited" rate rises to come, but if certain Brexit scenarios materialised the Bank would cut again if necessary. The Bank said that it did not expect interest rates to return to their long-term average of 5% “for many years” because the fundamental structure of the economy had significantly changed since the financial crash. Andrew Sentance, senior economic adviser at PwC, said: “Businesses and consumers should be able to adapt to a well-communicated and gradual series of interest rate rises, after nearly a decade of exceptionally low borrowing costs. Higher interest rates should also provide some much-needed relief to savers who have seen their investment returns eroded significantly since the financial crisis.” Meanwhile, high street banks including Lloyds, Nationwide, RBS, Barclays and HSBC, are under fire after announcing plans to hit homeowners with interest rate hikes from today while failing to pass on higher rates to savers.BBC News

July 2018

UK business borrowing falls by 1.8%Outstanding lending to UK businesses has fallen by 1.8% since June 2017, according to research by UK Finance. Loan and overdraft lending from high street banks to non-financial business accounts has decreased to £263.8bn, but was up 9.2% to manufacturers. Stephen Pegge, managing director of commercial finance at UK Finance, said: “Monthly net lending to businesses returned to positive levels in June, driven by continued growth in borrowing in the manufacturing sector.Bridging and Commercial

FCA sets out crackdown on peer-to-peer lendingThe Financial Conduct Authority is planning to crack down on peer-to-peer lenders and crowdfunding platforms amid concerns that investors could be taking on more risk than they realise. The regulator called for the publication of more detailed standardised information about investments, charges and risks lenders faced. The FCA said: “When a platform advertises a target rate of return, we want that target rate to be achievable and for investors to understand and be fairly remunerated for the risks they are exposed to.” James Hurley in the Times looks at how the growth of online finance platforms has forced the FCA to scrutinise the sector more. Meanwhile, equity crowdfunding sites have welcomed the review. Crowdcube said that “this vote of confidence for the sector highlights that existing regulations are striking the balance of effectively safeguarding investors while continuing to facilitate the growth of a vital source of finance&rdqu o; for small businesses.Financial Times

Personal insolvencies at six-year highThe number of personal insolvencies in England and Wales has hit a six-year high. Figures from the Insolvency Service show there were 28,951 people declared insolvent in the past three months, a rise of 27% on the same period last year and up 4.4% on the first quarter of this year. It said the increase was driven by a record number of people taking out IVAs.The Times

BoE tipped to raise ratesThe Bank of England is expected to raise interest rates this week, pushing them to their highest level since 2009. The Monetary Policy Committee is widely expected to increase rates from 0.5% to 0.75%. Samuel Tombs, chief UK economist at consultancy Pantheon Macroeconomics, said: “The committee likely won't vote unanimously to hike rates - we look for a 7-2 split - but most members still believe that inflation will exceed the 2% target in the medium term if they don't start to withdraw some monetary stimulus now.”The Sunday Times

Tax change could leave commercial property owners with £8bn billCatax has warned that commercial property owners could be forced to pay more than £8.6bn if they fail to revalue ahead of a major tax change. From April 2019, UK commercial property held offshore will be subject to capital gains when it is sold.Mortgage Introducer

Complaints Commissioner criticises FCAThe Complaints Commissioner’s 2017-18 annual report has criticised the Financial Conduct Authority regarding what it describes as “attitudinal problems”, which include ”defensiveness, lack of candour, and lack of empathy”. Commissioner Antony Townsend formally investigated 83 complaints against the FCA; 67 of them alleged that the FCA was failing to regulate the financial services industry properly, and in many cases this hinged on a specific firm as an example. He found the FCA has an "unwillingness to admit error" and spends too much time "constructing defences for past actions". In response, the FCA said: “We do accept that we could seem defensive sometimes and we will work on how to communicate in a more effective and transparent way”.Financial Reporter

Demand for bridging finance risesAccording to the MTF Broker Sentiment Survey, one third of the122 specialist brokers canvassed said funding development projects was the most popular reason for completing a bridging loan in the second quarter of the year. This was up from 24% during the same period of 2017. Refurbishment was the second most popular reason for getting a bridging loan at 27%, compared to 19% during the second quarter of 2017. MTF found that overall demand for bridging finance increased in the second quarter, with 38% of brokers noticing a rise in bridging loan volume, up from 30% in the first quarter of 2018. The biggest demand for bridging loans in Q2 2018 came from the South East, followed by the Midlands.Best Advice

FCA to monitor early arrearsThe Financial Conduct Authority is looking into the fact that three in every 1,000 new mortgage customers are unable to meet their monthly payments within six months of the loan being taken out, with one in every 600 into arrears by the point the second payment is due. The regulator said: “Where a consumer falls into arrears within a short period of time (two to six months) this could be an indicator of an unsuitable or unaffordable product having been sold.” It added that it would monitor the situation as “any sustained increases may indicate that we need to do more work to assess if the harm of unaffordable or unsuitable mortgage sales is increasing.”The Daily Telegraph

Rise in UK landlords incorporating their portfoliosThistle Finance has reported a 30% rise in the number of UK landlords incorporating their portfolios during Q2 2018 compared with the previous quarter. Commenting on the fact that the average size of portfolios being incorporated fell by around 40%, Mark Dyason, managing director at Thistle Finance, said: “Landlords that are genuinely committed to buy-to-let are starting to optimise their portfolios, not just by remortgaging on to better rates – where there’s a huge amount of activity – but by moving into limited company ownership.”Bridging and Commercial

Bridging lenders have rushed into development finance

Jonathan Newman, senior partner at Brightstone Law, says there has been an increase in lenders over-valuing the gross-development-value of properties, affecting whether they come to market. “Short-term lenders went into development finance in a hurry probably circa four or five years ago” he said, adding “It is quite a specialist area of lending … Lenders are now beginning to see problems arise which they weren’t expecting mainly as a result of a lack of experience”. He describes development lending as “double the risk” of other types, and advises lenders use experienced solicitors, specialist valuers and knowledgeable quantity surveyors to manage risk.Mortgage Introducer

MoneySupermarket looks to mortgage marketMoneySupermarket is investing £1m in Podium, a start-up aimed at digitising the process of taking out a mortgage. The Times notes that the move, a 50/50 joint venture with entrepreneurs Matt Denman and Mark Hawkins, puts MoneySupermarket in competition with fintech firms such as Trussle, Habito and Dynamo, who are also developing digital mortgage broking services.The Times

Financial services helping to boost SME economy

Research from Amazon has shown that financial services are among the sectors that are leading the SME economy, with companies in the sector seeing a 1.7% increase in revenues over the past year. The Q2 2018 Amazon SME Growth Tracker from Capital Economics found that while small business owners across all regions were not feeling positive about their business conditions over the coming year, SMEs in the financial services sector were feeling more optimistic, with the SME Confidence Index showing a score of +3. Commenting on the research, Amazon’s UK Country Manager Doug Gurr said that it is clear that if there is confidence in business conditions, then owners of small businesses are creating plans for job creation, growth and investment, so the more that can be done to increase SME business confidence, the greater the benefits are for the whole of the economy.London School of Business and Finance

Lawyers offer cautious welcome to FRC’s new code

The Times’ Jonathan Ames talks to a selection of lawyers about the Financial Reporting Council’s updated corporate governance code. The changes, which aim to improve workforce relations and the independence of board chairs, and will require remuneration committees to consider reputational and other risks from excessive pay, were broadly welcomed. The paper also notes that the BEIS consultation on legal reform for companies facing insolvency has ended. The proposals would make directors of a parent company personally liable for losses to a subsidiary’s creditors where that subsidiary is sold and subsequently fails. This plan, says Jamie Nellany, a lawyer at Addleshaw Goddard, would be “at odds with the concept of limited liability and our business-rescue culture.”The Times

Unelected decision makers need reining in

Former deputy governor of the Bank of England Sir Paul Tucker has called for the Financial Conduct Authority to be reformed or stripped of its independence. Sir Paul was commenting on the power held by unelected technocrats within Britain’s regulatory structures arguing that the more influence they have the more “alienated people will become.”The Times

Specialists and challengers see biggest mortgage lending growth

New mortgage lending data from UK Finance shows that specialist lenders and challenger banks saw the biggest growth in lending over 2017. Gross lending totalled £257bn, up 4% on 2016, slightly down on the 11% growth rate seen in 2016. Challenger banks and specialist lenders saw an almost 20% increase in activity. UK Finance warned that uncertainties relating to the UK economy "have the potential to affect the path of lending for the rest of this year and beyond".Finance Reporter